Sacramento, California — As advancements in artificial intelligence (AI) continue to unfold, the regulatory landscape in the U.S. is evolving rapidly but remains fragmented. Unlike the European Union, which has established a comprehensive AI regulatory framework through the EU AI Act, the U.S. lacks a unified national law. Instead, various states are crafting their own laws related to AI, reminiscent of the piecemeal privacy regulations, achieving varying degrees of coverage and compliance challenges for businesses.
State-level regulations are emerging as more jurisdictions take action to regulate AI and automated decision-making systems. This trend creates a complex compliance environment for businesses deploying such technologies. Regulatory updates are coming from places like California, Arkansas, Kentucky, Maryland, Montana, Utah, and West Virginia, each adopting differing measures to address concerns surrounding AI.
In California, on May 1, 2025, the California Privacy Protection Agency (CPPA) voted unanimously to begin a public comment period on its proposed regulations concerning cybersecurity audits and automated decision-making technology. This period will remain open until June 2, 2025. Changes in the draft regulations, reflecting substantial revisions influenced by public feedback, include a narrower definition of the technologies that qualify as automated decision-making, stipulating specific rights for consumers affected by significant decisions related to finance, employment, and healthcare services.
Meanwhile, Arkansas recently saw Governor Sarah Huckabee enact two AI regulations focused on public sector uses. One measure requires public entities to develop comprehensive policies governing authorized AI use, while the other establishes ownership rights over content generated by generative AI. This new structure gives individuals who feed information into AI systems ownership of that generated content, provided it adheres to existing intellectual property laws.
Kentucky has also joined the fray, enacting SB 4, which mandates the Commonwealth Office of Technology to create standards for AI policy. Similarly, Maryland has passed HB 956, establishing a working group to study private sector AI applications and propose regulatory standards.
In Montana, legislation signed by Governor Gianforte guarantees individuals the right to challenge government restrictions on private AI use, urging the necessity for narrowly tailored policies that respond to compelling government interests. As part of this law, critical infrastructure facilities utilizing AI must also adopt risk management strategies aligning with national and international standards.
Utah has been particularly active in revising its AI regulations. Governor Spencer signed several bills, including SB 332 and SB 226, which modify the disclosure requirements for consumer-facing AI services. Under these changes, entities must inform consumers when they are interacting with AI as opposed to a human, particularly during high-stakes interactions involving sensitive data. One unique addition, HB 452, regulates AI-supported mental health chatbots, prohibiting certain practices during user engagements.
West Virginia has enacted HB 3187, which creates a task force dedicated to identifying opportunities related to AI and developing best practices aimed at the responsible use of AI in the public sector while safeguarding individual rights and consumer data.
At the federal level, an emerging deregulatory trend is gaining traction. Recent executive orders from President Trump have dissolved previous efforts initiated under President Biden aimed at ensuring safe AI development. The newly titled initiative, “Removing Barriers to American Leadership in AI,” aims to enhance U.S. leadership in AI to better secure economic interests and national security. This deregulatory shift is further emphasized in a House Budget Bill proposing a ten-year prohibition of state enforcement concerning AI regulations.
This rapidly evolving landscape of AI regulation highlights the urgent need for businesses to stay informed and adaptable to navigate compliance across a myriad of state-level rules and federal initiatives, especially as the conversation around AI continues to gain momentum.
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